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Sturgis Trademark Battle Not Resolved

Wednesday, March 13, 2013
Key issues in the legal battle over Sturgis trademarks should be decided by a jury. The determination was reached by US District Magistrate Judge John Simko, who filed a March 6th report over the dispute between Sturgis Motorcycle Rally, Inc (SMRi) and defendants in the case, which include Rushmore Photo and Wal-Mart. Simko filed his report and recommendation for US Chief District Judge Jeffrey Viken, who will accept or deny the recommendations.

The core issue of the legal dispute is SMRi’s claim of infringement of its “Sturgis” trademark. The defendants, which indirectly represent several third-party entities and rally vendors, argue that Sturgis is a generic, geographic term that should not be licensed. The case also alleges fraud in obtaining the trademark. 

In response to the ruing, SMRi issued a press release stating “that they are pleased to have prevailed over every legal action thus far in their ongoing effort to protect the Sturgis trademarks against infringing users.” 

In reference to Simko’s recommendation report, SMRi claims it “does not deny or even recommend denying the right for SMRi to continue to use the legal Sturgis trademarks it has have been entrusted to protect.”

However, Simko makes several recommendations that do not favor the Plaintiff (SMRi) and identifies three basic issues in the case: “(1) licensee estoppel; (2) fraud on the Patent and Trademark Office (PTO); and (3) acquired distinctiveness.”

Licensee estoppel is a legal notion that a trademark owner be free of legal challenges by a licensee. Simko states that in this case the Plaintiff (SMRi) “fails to prevail on its claim of licensee estoppel” for several reasons, including the fact that Rushmore was never a licensee for the use of the “STURGIS” trademark in the first place, but instead a licensee for a logo not at issue in the lawsuit. Simko finds neither Rushmore nor Wal-Mart bound by license to SMRi.

Moreover Simko deems a jury should decide the facts on whether fraud was committed to obtain trademarks from the Patent and Trademark Office. In the recommendation report it states: “Contrary to the representation Plaintiff Sturgis made to the PTO about its exclusive use of the STURGIS, the term was commonly used by hundreds of others during the time plaintiff represented its exclusive use of STURGIS. But there is a fact question for a jury to decide – was it the intention of Plaintiff Sturgis to defraud the PTO?”

Simko continues on the final issue of distinctiveness, stating [emphasis included in original quotation]: “There is a fact question to identify into which category of distinctiveness STURGIS falls. There is also a fact question whether STURGIS has acquired distinctiveness as a result of secondary meaning, and if so, whether the distinctiveness identifies plaintiff Sturgis as the source of productions or whether the secondary meaning of STURGIS is the event itself”

The next step of the legal debate will be up to Viken, with the interested parties having 14 days (March 20 deadline) to appeal Simko’s recommendations.

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